Today, Huawei Xinsheng community released the summary of Mr. Ren Zhengfei’s German media Roundtable, which was interviewed on November 6. When talking about US sanctions against Huawei, Ren Zhengfei said: we don’t need the us to solve the supply problem. The US keeps the list of entities, and we can survive well. Here are the round-table summaries:
Summary of the Round Table of the German Media
Shenzhen, 6 November 2019
Ren Zhengfei: Welcome to Huawei, it’s a pleasure to meet you and i’m willing to accept your questions.
1, Georg Fahrion, Der Spiegel: First of all, thank you very much for inviting us over. It’s a pleasure to come to Huawei. Thank you for spending an hour communicating with us. Just after I came in, the environment here inspired my curiosity. My question is also related to the environment here. I found a large painting of The Coronation of King Napoleon of France in the corridor next to the stairs on the first floor. On the other side hangs a large portrait of the Battle of Waterloo. The Battle of Waterloo meant the demise of the Napoleonic Empire. Inspired by these two paintings, I would like to ask you: Is the Huawei Empire on the rise or in decline? Are you in a wartime state?
Ren Zhengfei: These two paintings have nothing to do with Huawei’s present, but are purely art deco. The photograph of the 200th anniversary of the Battle of Waterloo, which I saw at the Belgian Museum, was so beautiful that I bought it to decorate the house; the painting of Napoleon’s Coronation was painted by an employee’s family for four years, and he was going to give it to me to hang it at home, but our house was too small to hang up, and he transferred it to the company. These paintings have nothing to do with the company’s operating status.
Georg Fahrion: In your opinion, what is Huawei in? Because the word “trade friction” has been repeated many times. Is Huawei in a wartime state? If not, can you describe Huawei’s current state?
Ren Zhengfei: Huawei’s development, like the index curve, is generally on the rise, there is a twist and turn. Overall, Huawei is developing healthily.
2, Germany 2 Ulf R?ller: I saw this picture in the Huawei Campus. This is a fighter who was shot in the face during World War II. Why did you choose such a picture to compare Huawei’s current situation?
Ren Zhengfei: When the “physical list” came out, I came across this photo online. The plane was hit all over the bullet holes, but still flying, think Huawei is very much like this plane, has also been hit, but also still survive, still tenacious flight. We have stepped up efforts to fill the “hole” during this period so that Huawei’s “aircraft” can continue to fly and allow it to land safely.
At present, we will do the next five to ten years of development research scientists, experts back, formed a “return to the village group”, to kill back the horse gun to make up the “hole”. Now is to survive, to make up the “hole” first, not to lead the world. Now most of the “holes” have been filled and planes can continue to fly; We bring together thousands of scientists, experts and engineers to work together, and in two or three years our broken aircraft may become a brand new “aircraft”.
Ulf R?ller: Who’s shooting Huawei? Is the U.S. shooting Huawei?
Ren Zhengfei: Yes, the U.S. government shot.
Ulf R?ller: How do you shoot?
Ren Zhengfei: Entity list, prohibit us from using U.S. parts, software… in various ways.
3. DVH Media Group Frank Sieren: You extended an olive branch to Europe and expressed your desire to open up to europe. Huawei is already so strong, why do you want to make such a gesture? More broadly, how important is the future business development of western countries to China?
Ren Zhengfei: Of course, we want our goods to be sold all over the world, the more we sell, the better the proceeds. Because we have to offset research and development costs, etc., or need market size, whether Europe, Africa, the Middle East … It’s our market space, and we’re all active in serving people in these areas. Africa is hard to run and can’t make a lot of money, but we’re still trying to serve in Africa.
We believe that the German parliament and government will choose policies that are in the interests of the German people, and we believe that the best decisions will be made on the basis of facts, evidence and adequate discussion. If a few countries in Europe explicitly don’t choose us, and they don’t have any ideas about them, it’s okay to exit the market in that country.
Frank Sieren: Why does Huawei want to work with Germany or Europe as a whole in terms of research and development? Huawei is already very strong in technology.
Ren Zhengfei: This is an era of global openness, and taking a closed road will not succeed. For example, we work with European scientists on future products and support Europe in developing its own software, application and industrial capabilities, and working together to contribute to an intelligent society. Have you ever visited our production line? We use Siemens, Bosch and Dassault’s software on our production lines, mostly in Germany and Japan.
Frank Sieren: How’s it going?
Ren Zhengfei: It works very well. We added some artificial intelligence in Siemens, Bosch, Dassault’s software, the basic production line efficiency. Therefore, we are very open, not only in Europe to study our new products, but also to provide services to Europe. For example, driverless, intelligent artificial intelligence in cars, Huawei is currently the world’s strongest. In many ways, we have increased cooperation with European companies, in the intelligent computing of cars can be a whole piece of cooperation, cut cooperation, only chip-only cooperation … and European enterprises to grow together. So we are also making a big contribution in Europe.
Frank Sieren: Why is Huawei so strong on driverless drivers?
Ren Zhengfei: Because we started by designing chips according to the L4 standard, all chips were designed according to this standard. Europe, Japan, China go to the same technical standards, the United States follows another technical standard. Huawei’s smart computing is very high in the world, so we are very strong in this area.
4, German radio station Steffen Wurzel: If the final Decision of the German government is not in Huawei’s interest, will Huawei consider withdrawing investment from Germany?
Ren Zhengfei: Investment will not be withdrawn, investment is not related to sales. If you say that our products are not in line with the requirements, you will not buy, we can not sell. We don’t have to be emotional. For example, the Canadian government was commissioned by the United States to detain my family, and I did not hate Canada for it, so I reduced my investment in Canada. We’ve invested a lot in Canada this year, and we’ve added more than 200 scientists and experts this year, and we’re supporting Canada as a center of innovation like Silicon Valley. Because Canadians and Americans are mostly from the same people, living habits are the same, and very close, it is easy to attract some friends to participate in innovation. At the same time, there are many scientists can not get a U.S. visa, many international conferences, can be transferred to Canada to open, open more, innovation will boil over. We separate personal grievances from corporate development.
If Germany does not choose us, it will not affect our progress in Germany. You see, we recently built 1 million square meters of new industrial plant in Matsuyama Lake, large-scale purchase of Japanese and German industrial equipment, equipment to meet next year’s production scale. It would be naive not to consider only one political attempt if we did not consider our own interests.
From my personal technical point of view, Germany is in great need of us, because artificial intelligence is extremely important to German industry 4.0, and the German precision manufacturing industry needs low latency, large bandwidth transmission system to support. Because we do the best, our customers know to choose us.
DVH Media Group Frank Sieren: But you shouldn’t buy industrial equipment from Japan, and other places might offer better prices.
Ren Zhengfei: Well, Japanese companies are our strategic partners, so why not? Japan’s management and German management are different, the Germans are very confident, the product production to the last test; So we built factories in Wertheim, Germany, and the Japanese ship bridge, combining the advantages of Germany and Japan, so that we could produce high-quality products. The customer doesn’t buy it? No way. The key is that we don’t have so many products to sell, we are mobilizing Chinese customers to buy less, let’s supply foreign customers first. As you know, it takes a process to expand the production line of a new product.
Frank Sieren: How do you convince them to buy less? It’s hard.
Ren Zhengfei: Persuasion is also very difficult, but no way, we really can not supply. In a few days is double eleven, that is, China’s shopping festival, I suggest that the terminal company can make less money, because this year the company’s profits are too much. The terminal CEO agreed, but the supply chain refused, saying, “We prepared a total of 10 million units for the shopping festival, if the price reduction, may greatly expand demand, can not deliver the goods, is equal to a short cheque.” ”
Frank Sieren: That’s a big problem.
5, Fabian Kretschmer: Recently the Trump administration has released some positive signals to try to downgrade trade frictions and take the first step toward a phased trade deal with China. Mr. Ren, what do you expect if this agreement can be reached? Can this help mend holes in Huawei’s plane?
Ren Zhengfei: Because we don’t sell in the U.S., the U.S.-China trade negotiations have nothing to do with us, and I’m not paying attention to the news, which can’t answer you.
Second, we don’t need the U.S. to solve our own supply problems, and the U.S. continues to keep the list of entities, and we can survive well. I wonder if you took a picture when you visited our showroom? When the Associated Press visited the showroom, we allowed them to take pictures of each circuit board with out of American chips and components. The list of U.S. entities hurts U.S. companies, not us, the U.S. government loves to withdraw, do not love to withdraw, just consider the interests of U.S. companies, do not need to help us consider.
6. German radio station Steffen Wurzel: How’s your daughter in Vancouver now? How often do you talk on the phone?
Ren Zhengfei: We have very few calls. Her mother is with her, her life is generally good, her mental state is still strong, I believe she can survive this test.
7, German radio station Steffen Wurzel: You must have a special relationship with Europe. We are now in an environment that is all European, and our tea-drinking porcelain is also made in Germany. China also has a lot of very good porcelain, why do you like Europe?
Ren Zhengfei: There are wine glasses are also German, hard knives and forks are also German. I have said that if Germany did not have labour laws, all the knives and forks in the world could have been made in Germany. The use of artificial intelligence will free Germany from the shackles of labor law and produce a blowout.
8, Georg Fahrion, Der Spiegel: You’re a very humorous person, but I’d like to ask a more serious question. As you mentioned earlier, Huawei has supply problems. From a sales perspective, the U.S. is not an important market for Huawei. But from a purchasing perspective, the U.S. is an important market for Huawei. How does Huawei plan to overcome the procurement difficulties it is facing, especially google and Android?
Ren Zhengfei: I can answer with certainty that we can continue to grow at a high rate without American supplies. But we are always willing to work with American companies, and we will always embrace globalization, and we will not follow the closed path of independent innovation and self-reliance.
9, Georg Fahrion, Der Spiegel: In 14 days Huawei may not be able to use Google’s products, including the Google App Store. How to solve this problem? I know Huawei is developing its own operating system, but this is a huge system engineering, it will take time, how does Huawei plan to overcome short-term difficulties?
Ren Zhengfei: This question to November 20th to see again, welcome you to visit again on the 20th.
10. German Radio 2 Ulf R?ller: I’d like to ask you a personal question. Before this interview I also read some about you, I think your personal development is in fact a good reflection of China’s rise. When you were young, you had a flat family, you didn’t have enough food, you didn’t have much money, but you’re sitting here, you’re a real success. In many ways, it’s like China’s rising and becoming a superpower. Let’s take a look at Europe. You just said that many of Huawei’s products are so good that other companies can’t do them, and these products are very important. As you mentioned earlier, a lot of the cutlery, knives and forks here come from Germany, and many of the museum’s cultural exhibits come from European countries, but there are no high-tech products from Europe. In Germany and Europe, for example, do you think Europe is going downhill compared to China, and is China rising to become a superpower?
Ren Zhengfei: The high-tech offered in Europe may be invisible to the naked eye. Huawei’s human resources system management uses SAP software, product design, production, supply of the entire system is siemens, Bosch, Dassault’s software, we still use a lot of advanced high-tech products in Europe. Many of the mathematical, physical, chemical, aesthetics contained in our equipment… Also from France, Germany, Italy … it should be said that we use a lot of advanced European technology.
Europe should now change some business rules and dare to sell things to China. Will Europe and China go to war? Since there will be no war, why continue the rules of the economic blockade of the past? America doesn’t sell this thing, it’s a good opportunity for Europe to develop, why not take the opportunity to fill the gap in the United States? Clearly we need chip products on a large scale, why not invest heavily in advanced chip manufacturing in Europe? Why don’t you make money? There are big chip factories in Europe, and as long as you invest more, we’ll buy more. Of course, there’s less investment from the U.S., and if it’s over 25 percent, the U.S. will limit your sales. If you don’t need Chinese investment, you can absorb middle-east investment.
As we all know, the speed of social information ization is getting faster and faster, and now the supply capacity can not keep up. Many basic industries, such as Infineon, NXP and ST, in Europe, need to invest more in buying equipment, and chip equipment is also produced in Europe. You can persuade them to invest, and if they don’t have the money to build a plant, we can prepay for the money to support their development. Opportunities are very difficult to obtain, we must take advantage of the development as soon as possible, if you miss this opportunity, you can not catch up.
11. DVH Media Group Frank Sieren: What do you think is the difference between Western and Chinese companies? Is there a difference?
Ren Zhengfei: Western companies are better. What does the names “Germany” and “Switzerland” mean? It means high quality. Chinese companies do not yet have such brand influence.
Frank Sieren: In addition to Huawei.
Ren Zhengfei: Huawei has not yet reached this level.
12, Georg Fahrion, Der Spiegel: In mid-October, Huawei released its financial data for the first nine months, with revenue up nearly 25 percent. Given the current global economic environment, how did this growth come about?
Ren Zhengfei: Our growth rate in October has fallen to 17%. This year’s growth may be that all employees are feeling the existential crisis, trying to row, and cutting revenues and profits.
13, Germany’s second Ulf R?ller: When I arrived in China, I realized that Huawei was regarded as the pride of the country by the Chinese people. More and more Chinese are now choosing to buy Huawei phones in the hope of helping huawei weather the difficult period of trade friction. My question is, if Germany makes a political decision not to involve Huawei in its 5G construction, will Germany’s cars and other industries be counterproductive in China? How will the Chinese government react to this before, having done such a thing before?
Ren Zhengfei: First, I have criticized the company, do not over-consumer spending people to our enthusiasm, we must adhere to the customer-centric, customer experience, customer perception in the first place. Second, will there be a psychological reaction to german and Japanese cars? As it turns out, China is still full of German and Japanese cars.